martha: continue the saga of the clown no doubt in coming days as well. a lot of news going on, obviously. very serious story in egypt. we'll be back. bill: catch you tomorrow. "happening now" starts right now. martha: bye, everybody. jon: we begin with a fox news alert on egypt. president obama announcing the united states is canceling joint military exercises with that nation because of violence there. the biennial bright star exercise is now scrapped the announcement cops a day after violence in cairo and other cities took more than 500 lives. supporters of the muslim brotherhood vowing to keep on fighting after police backed by bulldozers broke up two sit-in camps. we'll have a live report from the region in moments. first, brand new stories and breaking news. jenna: as jon was talking about the president reacts to the crisis in egypt.

what he is saying about the increasingly tough situation there. what it means for our nation's relationship with a critical ally in that part of the world. chaos in a class as a gunman walks in and shoots the instructor dead. we have a the latest on the manhunt for the suspected killer there. cyber you can staing a beauty queen. we'll explain why the fbi is getting involved after the reining miss teen usa says a stranger hacked into her computer. it is all "happening now." jenna: but our top story remains egypt today. at least 500 people were killed in one day. we're happy you're with us. i'm jenna lee. jon: i'm jon scott. the violence in egypt leaving more than 700 others injured. protesters storm ad government building in cairo, setting a fire at its entrance, this happening

more than 24 hours after at police broke up two pro-morsi sit-in camps. protesters were fighting back. the chaos spread to other cities in egypt. state of emergency declared and a nighttime cure few was put in place but the turmoil shows no signs of letting up. leland vittert has more for us. leland. >> reporter: the army and muslim brotherhood say they are not backing down. we've not only seen government buildings torched but churches torched in revenge by muslim brotherhood because they kay the coptic christian population is supporting the army. today in cairo it is the day after. you also have protests and you have massive cleanup operations underway. there is overwhelming military presence there especially in the center part of this city. you have the police out and you have the army out. and then obviously you have the families out of the dead. more than 500 people died there and that who is, they are going to bury.

you can imagine at the funerals for the muslim brotherhood supporters, there is going to be a call to defend their position once more. and avenge the deaths of those who died at the hands of the army in that violence yesterday. at times cairo looked like a war zone there as muslim brotherhood gunmen fired at the army and the army fired back. both with ak-47s. the army there in egypt has brought back what they call the emergency law which allows army to detain people indefinitely without charge. that was a page out of the playbook from 1980s and 1990s when the muslim brotherhood was an outlawed organization. its leadership rounded up and held incommunicado for years. that's what we're seeing happen once again. obviously the democratically elected president there in egypt, mohammed morsi, he is held incommunicado. that is who the muslim brotherhood wants back into power. you have a number of other

top brotherhood officials have been rounded up over past couple days. there on the streets they are still chanting with our blood, our soul, we defend islam. they're not saying we defend egypt. we defend islam. many muslim brotherhood supporters say they would rather die and face martyrdom and then return back to mosques and return the streets of cairo to peace. whether or not they are willing to live up to the pledge will be decided tomorrow after afternoon prayers. we'll see really how this will go, jon. whether the army will take control, keep control of the streets. whether we see the running street battles once again. jon: typically fridays are the worst days in egypt during this period of conflict. leland vittert. thank you. jenna: it is really important to get the view from the ground in egypt. chaos is in the streets there. we wanted to speak to someone recently in the country and met with one of the muslim brotherhood leaders, whose daughter was killed in yesterday's violence. he tells us he doesn't believe the united states

has had this kind of a dilemma in the middle east in north africa in decades. he joins us on the phone now. recently he left egypt. he is now joining us from turkey. barack, from your perspective, from your vantage point, why is this such a dilemma? >> this is the biggest dilemma we've had with egypt since the 1960s. egypt is supposed to be the most stable arab state in the middle east. it is looking a lot like yemen. the problem we have washington has few carrots left with egypt. all we have left is 1.5 billion dollars in aid we give them annually and a billion dollars does not buy as much as it could in 1980 when aid first reached the billion dollar mark. inflation has eroded much of that. after the military overthrew president morsi, saudi arabia, united emirates and wait stepped up with 12 billion dollars in one week. that is more than the united states gives in almost a

decade. the problem if the united states does cut aid, the generals will use that move to a nationalist, anti-foreign backlash which will only increase the popularity and shift the conversation away from more than 500 dead. jenna: if i could, that's sounds what our president was talking about. the talk he gave less than an hour ago, he took on directly the critics blaming the united states for the state of egypt right now, saying america doesn't determine the future of egypt. we want a peaceful, democratic, prosperous country. how do you think those words are being heard on the streets of cairo today? >> they're not being heard very much at all. when the people see more than 500 people dead and international community is bassally sittings on its arms and doing nothing. and giving, in their opinion, tacit approval to the killings that the generals and military is carrying out. they really want actions and the international community

doesn't have anything to give them. jenna: let me talk a little bit about the muslim brotherhood leaders you met with. there are a few narratives emerging from the news last couple days. these are innocent protis terse that the government is cracking down on violently and quite frankly in the wrong way. but then you have other news that is suggesting that the protesters are not that innocent. they are armed as well and are firing and stoking, aggression from the military. and it is tough to make sense of what's right. is there a good side and a bad side in egypt right now, barack? who should wed be supporting? >> unfortunately hard to tell the good guys from the bad guys and scenarios. the muslim brotherhood does not share our values and the things that we believe in. however the muslim brotherhood was elected democratically and democracy is a very core value of the western belief system. i was in in nasser city. i spoke to the member of the justice party.

his daughter was killed. i spoke to a minister. i spoke to a bunch of other leaders and people on the ground protesting. they told me we will not go to violence. we're not going to embrace violence. we'll embrace the martin luther king peaceful approach. unfortunately they didn't expect that the military would respond with cannons and guns. the military has a monopoly of force right now. the brotherhood and its supporters, really can't do anything other than clank with the sticks in the street. if they do, there will be more killing at this point in time. jenna: that is an interesting point i think that is lost in this. we're talking about what is america's role. really our money compared to what the saudies are putting into egypt right now looks like very little, which is tough as taxpayers to understand, as a billion dollars plus. but your context is important. if the saudis and other big governments in the middle east supporting the egyptian military, then, who are the actors that are supporting the must lump brotherhood?

what sort of dynamic does that set up for the weeks and months to come in egypt? >> they very much supportive of the muslim brotherhood, ever since the fall. qatar and mubarak did not get along. they offered money early on. they're a big supporter of the muslim brotherhood. saudi arabia has never felt comfortable with the brotherhood. they didn't want an islamic wave spreading through the region. they were much more comfortable with mubarak and military ruling. they came in and shored up the government almost immediately. the brotherhood really does not have many friends in the middle east right now. jenna: do you think we can just step back and do nothing, cancel the military exercises, consider canceling aid and that's it from the united states or do you think that more aggressive action from the united states is necessary? >> well, we canceled the bright star exercise. that basically doesn't affect the military, the largest joint exercise in the world. it gets a lot of play in the military press.

i remember, in egyptian press. i remember when i was a student living in egypt they played it up. it will really not affect the military. it really won't create a backlash. if we delay weaponses transfers we're talking about, that will have more effect on generals because they like the toys that they play with. jenna: interesting. always great to have your perspective. appreciate it very much. i'm sure we'll be talking soon and thank you, on behalf of our viewers. >> thanks for having me, jenna, well, right now the obama administration is trying to roll out the new health care law. you have heard about some of the glitches. a political action group that supports the president's agenda is releasing a new tv ad promoting obamacare's benefits. listen. >> when the affordable care act was passed we ended up getting a $350 rebate from our insurance company and then the premiums would go down by about $60 a month. jon: let's talk about it with karl rove. he served as deputy chief of staff and senior advisor to

president george w. bush. he is a fox news contributor. karl, welcome. that spot tells the story of a family in north carolina who received an insurance rebate because of obamacare. what do you think about promoting the president's health care law based on that kind of a, you know, monetary rebate? >> well, it's not going to do too well for a reason very few people are getting those rebates. those rebates are a part of the,#: affordable care act called the medical loss ratio. this provision basicallyally says insurance companies have to take 85% or more of the premium income they receive and pay it out for medical bills. if you don't pay out at least 85% of the premium income for medical bills, then you have to give a rebate to everybody that, is a policyholder. now according to the centers for medicare & medicaid services at the department of health and human services, last year, we're talking about rebates gone out for last year, that was the

reference in the tv ad, 2.7% of americans are getting a rebate. so one out of every 30 some odd americans are getting a rebate. the average is $9 per family. on the other hand, everyone is seeing premium increases. virtually everyone. the kaiser family foundation says that the average american family of four has seen a $1975 premium increase since the affordable care act was passed. smaller obviously in the years immediately after its passage in 2010. but last year, $1975 higher than it was in 2010. now is this is primarily because of what is called community rating and essential ben its f these are two other provisions in the affordable care act. community rating means younger workers have to pay more than they otherwise would for health insurance in order to subsidize coverage for older, less healthy workers. essential benefits says, you

can't have a skinny plan. you have to have lots of provisions that you may or may not need or may or may not want but you have to pay for them. both of these have been huge cost drivers. they will continue to be in the future. $98 in an average check for, 3% of the population. less than 3% of the population, and average of, premiums this year, $1975 bigger than they were when the law passed. that's not a particular good tradeoff to try to sell the american people. jon: there are all of these delays. the administration delays employer mandate. they delayed a provision that was going to, be able to sort of verify incomes. and now, they are delaying the caps on the spending, that you have to do to pay, you have to make to pay for your own health insurance. where, do they get the authority for all of this, first of all? >> well, good question. i don't think there is discretionary authority in the law to basically say, we're not going to implement

this portion of the law. now you're right, the president gave a benefit it corporations saying i will delay for a year the employer mandate. he did that for politics. he didn't want a lot of employers dumping coverage during the fourth fourth election. interesting you mentioned the last one. in last february, in a very obscure regulation the president gave certain insurance companies a pass, a delay of this requirement that they cap the out-of-pocket expenses for, for, for their customers. now it is not all insurance companies. it's many so insurance companies. and they did it under the cloak of a very complex regulation that only recently has come to light and been understood by people who have been covering this very highly technical issue. so the administration, not only is delaying it but delaying it to the benefit of some companies and their customers and not all companies and all customers. and of course, we've delayed the employer mandate, giving business a pass for a year. but the administration

explicitly refused to support any legislation to give a delay for the individual mandate. so, you're right though. i don't think they have got discretionary authority to do this. jon: karl, we'll take a quick break. i have another question for you on the other side. karl rove, stay with us. we'll be back in a moment when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap

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jon: once again the administration is, or i should say, organizing for action, what used to be the obama campaign organization, obama for america, is taking out television ads supposedly, a seven-figure buy they will pay, by the end. summer, to try to convince people that obamacare is a good thing. we're talking about it with karl rove, who served as chief of staff and senior advisor to president george w. bush, a fox news contributor as well. so one thing, karl, for organizing for action, the president's old campaign group, to get people motivated to vote. that doesn't cost you anything but apparently what they're trying to do, they're running commercialals a lot on cable channels like bravo and lifetime which have a lot of female viewers

mothers, because, the feeling is that these mothers will be able to convince they're healthy, younger, children, you know, the 21, to 29-year-olds, to go out and sign up for obamacare. will it work? >> we will see. what's interesting is, the strategy, the imperative behind the strategy. why are they doing this? it is because as they, their goal is to sign up a certain number about people for obamacare next year. i believe the number is around, i want to say, five, north of five million. of those, they need to have three million be younger workers, workers under the age of 35. it goes back to a provision you and i talked about earlier. community rating. affordable care act causes younger workers to pay higher premium than they would otherwise pay in order to subsidize the insurance coverage for older, less healthy workers. so the numbers don't work in the affordable care act, unless at the beginning you get a lot more younger people to sign up, as a

share of the, of the affordable care act than older folks. jon: that is the question i'm asking is. it is easy, may be easy to convince people to go out and punch a ballot because that doesn't cost them anything. but you will have to try to convince these folks to spend hundreds or thousands of dollars a year to buy health insurance many of them might feel they don't need? >> look. the, organizing for america says they're going to spend seven figures. well, guess what? the federal government is going to spend, is going to spend nine figures in order to do the advertising, to back up the affordable care act. they're talking about, over 100 million dollars worth of advertising. and they're picking, what is interesting to me, the markets that they're picking. they're not picking beg ones, not l.a., new york and chicago. of markets they're picking, virtual all of them are in states with republican governors, or, like for example, charlotte, north carolina and new orleans, states with democrat senators who voted for

affordable care act under attack for it and defending the vote. those are kind of places they're going to spend taxpayer dollars in order to advertise a program all designed to get again, primarily younger families, younger workers. they will pay a higher premium. that will subsidize older workers. jon: we'll see how this thing goes as the campaign rolls out. see how many people sign up. karl rove, thank you. >> you bet. jenna: terrifying day at the gym as an exercise instructor is gunned down in front of his class. now we're learning more about the victim as police continue to search for a killer. recent controversies involving cybersecurity breaches are raising new questions about computer hackers like if there are any good guys out there. we'll talk about that. new concerns about the "fast & furious" gun-walking scandal. where the last firearms showed up and what the justice department has to say about.

it

jenna: right now some crime headlines we're keeping eye on for you including today being a sentencing day for a man who impersonate ad rockefeller. he was found guilty this year for a pair of murders committed in 1985. faces up to 27 years in prison. police discovered his real identity several years ago. you might remember the story when he kidnapped his own daughter. a big story out of orlando. police are searching for a gunman who walked into a cross fitness gym and shot the instructor to death. nobody else was injured. there are report that is the victim survived a drive-by shooting last year. a lot of sketchy details about this. police are looking for the killer. new details on the trial of andrea schneiderman, who was accused of lying about

an affair of her boss who was convicted of killing her husband. the defense could rest today. jon: some new information for you on the controversial "fast & furious" gun-walking scheme. three more guns have been found at recent crime scenes in mexico. the justice department says, those can be traced back to the u.s. operation. steve centanni is in washington with the latest. what do we know about these newly recovered guns, steve? >> they were rifles made in romania, all sold at one gun shop in arizona to two different people. they were purchased three years ago at the lone wolf trading company. that's a gun shop in glendale, arizona. all three of the guns were found at crime scenes in mexico. now tracing documents, obtained from the justice department's bureau of alcohol, tobacco and firearms, show the guns were bought in 2010. they were part of "fast & furious" which encouraged gun shops to sell specific weapons to drug cartels in hopes of tracking them down.

well the sales took place but authorities lost track of 1400 weapons. two of the guns were sold to a man who is believed to have purchased 700 weapons as part of "fast & furious" the other rifle bought by sean steward, who was convicted on gun charges in 2012. we don't know the exact locations where these guns were recovered, jon. jon: so what is the status of the "fast & furious" investigation right now? >> well, it is ongoing. the house oversight committee suing for the release of certain documents related to the program. attorney general eric holder as you remember was cited for contempt of court or contempt of congress for failing to hand them over. all this coming to light after the murder in december of 2010, of border agent brian terry. he had been shot and killed by illegal immigrants who were smuggling drugs into the country and now, even more news on "fast & furious" today, jon. jon: keep us updated. steve centanni in washington, thanks. jenna: a big story there. meantime army private

bradley manning apologizing during his sentencing hearing this week for leaking classified state department documents to wikileaks. his military trial coupled with edward snowden's revelations over top secret nsa surveillance programs raising questions about motives of different so-called hackers. in the world of cybersecurity, there are two types of hackers. on one hand you have the so-called good guys. known as the white hats, who have the goal to find holes in the system so they can be fixed and not exploited. on the other hand there are the black hats, the hackers who take advantage of those weaknesses and those quite frankly are the bad guys. we have a columnist and former publisher of "the wall street journal.". gordon, one of the things that came up in the conversations about these stories is whether or not the government wears the black hats or the white hats. how would you answer that question. >> let's start at the beginning which is why we're having debate about government surveilance. at end of the day the reason is, our 9/11 happened.

in the 1990s, there were at the request of privacy advocates new rules put in place. made it very hard for intelligence agencies to gather the dots of intelligence. if they could collect them they couldn't connect them. fbi couldn't talk to the cia. as a result al qaeda was able to have a success with 9/11. after 9/11, the nsa, the national security agency, was tasked with, let's use technology to try to identify and prevent terrorism from happening. it put in place a big project to monitor who is calling whom on cell phones. who is e-mailing whom on the internet. particularly focused on foreigners. for americans, americans benefit from the fourth amendment. the fourth amendment says, they're can only be reasonable search. reasonable search might be who is calling whom. not, what are they talking about. or who is e-mailing whom, not what is in the e-mails. the judge has to give a

warrant for that. we're having this debate because the government in order to prevent terrorism, is using new technology, to monitor a lot of communications, and the result has been, prevention of several incidents, including plots to blow up the new york subway and new york stock exchange. jenna: that said, the pendulum has swung back and forth. as you mentioned, from maybe not having enough surveillance and question is now. have we gone back too far? >> i think the better argument may be, have we gone far enough. jenna: would you like more, would you like more surveilance? >> we have not had a good enough debate in the united states why we have surveillance the obama administration has invited skepticism and even sina civil. they haven't -- cynicism. they haven't explained why irs targeted tea party. jenna: i would love to get your thoughts on this. the american people in general are wary of a tyrannical government. we're watching for the next one. are you concerned how these programs might be used under different administrations? >> i think we have to have

rules in place, that make it very, an environment where citizens feel as if their communications are private, but, where terrorism is being identified, and prevented. let's keep in mind, since 9/11, the two people who have violated the most privacy are bradley manning and edward snowden. 500,000 americans have security clearances of some kind. they're only two who violated those confidences. jenna: interesting point for us. they get the most tanks. in some cases they're called heroes. we have to consider those 400,000 plus. gordon, thank you for coming here today. we appreciate it. >> thank you, jenna. jenna: jon? jon: president obama getting bad news when it comes to his approval ratings. new poll numbers show americans are not happy with his workers specially when it comes to the economy. we'll talk about other issues dragging down his average. speaking of the economy

have you seen the dow? down 170 points right now. it was worse earlier. we'll tell you more about what the market doesn't like what the market doesn't like on this thursday.

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jenna: let's get back to wall street where the markets are struggling today. actually off the lows. the dow is trading lower than 200 points earlier. still not much better but we'll take a move in the right direction, won't we? one of the reasons for this is some words from wal-mart today

lowering the full year outlook. there's some concerns about sales at the world's biggest retailers. also cisco, another big company, a big tech company cutting about 4,000 jobs. then you have the oil markets reacting somewhat to the violence in egypt. you have oil trading higher as well so a lot of variables into these markets today. one potentially good sign for the economy, the number of americans filing for unemployment in the latest week is down to a six-year low so we'll take the silver linings where we can. in the meantime, we'll keep an eye on markets for you. >> some new polls show signs of trouble for president obama. gallop finds his overall approval rating is taking a hit. right now just 44% of adults think he's doing a good job. that's down 3% from june. this comes as approval for his economic policy also takes a nose dive. joining us is a fox news political analyst. let's start with the overall

number, the job approval rating, below 50%. what does it say to you? >> what it says to me is that the american people are growing weary. even if you look in the black community where this part of society supported the president, the approval rating is down 10 points. people want jobs. they don't want excuses. people want a better economy and a more prosperous america. the president needs to change his strategy. >> you talked about the economy. let's take a look at numbers from june specifically with regard to the economy. the president got 42% approval rating in june on his handling of the economy. today that is down to 35%. that's a seven point slide in two months. that's pretty significant. >> it's pretty significant but in all fairness, i think part of the poll numbers declining for the president also is from congress. washington, d.c. is disfunctional and american people are staying for and more disfunctioned so i think they're

sending a message they want president obama to be a leader. not a politician, not someone that gives great speeches but someone who will lead his congress. he is the leader of the free world. >> talking about speeches, he's been talking about immigration policy, talking about obamacare, he's been talking about even the george zimmerman verdict but what about the economy? should he be paying more attention? >> i think that he should be paying more attention to all things but the president's approval ratings, though, with terrorism and educations, race relations haven't changed that much with the george zimmerman verdict. the president coming out and speaking on that so it's kind of helping him in certain areas but at the end of the day, jon, it's the economy. the president's program race to the top is doing well regarding education and his policy dealing with warring interest rates on student loans. but still we need more policies that will create more jobs and not putting more people on welfare. jon: and wall street down today,

too, when you get a big company like wal-mart saying that it's got problems going forward, that suggests problems in the broader economy. there are folks of all economic strata who shop at wal-mart but especially on the lower end of the spectrum, if wal-mart is in trouble, one of the biggest companies in the country and a retailer who serves the rest of us, if wal-mart is in trouble, that's a bad sign. >> it's a very bad sign and also, jon, when you have unions, the president's biggest political backers, when you have democrats on capitol hill voting against the president's policies and proposals, what the president needs to do instead of having strategies of deflection and division and the blame game by saying that republicans are obstructionists, he needs to go to the hill and be a negotiator. he needs to lock himself in the room with republicans and come up with policies that will make the american people more prosperous because, jon, we know best what to do with our money

than the federal government and the president is talking about more tax increases. jon: in the meantime, we don't have the number on the screen but the people feeling about the direction the country is moving and only 22% of americans feel that the country is on the right track right now. when that number gets that low, that shows a pretty pessimistic american population, doesn't it? >> it's a lot of pessimism out there and i want to be optimistic that when congress comes back in september, they have a grand opportunity, boehner, reid and the president, to sit down and follow john mccain's plan of going and speaking to the leaders because, jon, the only way we can get things done in washington, d.c. is when we have our elected officials work together in concert. voting against repealing obama plan or voting to take the funding away from obamacare, that doesn't do anything. that's symbolic.

what we need is true policy. jon: we'll see if anybody in the building behind you is listening. thank you. >> thank you, jon. jenna: thousands of dollars worth of jewelry stolen by two men armed with a hammer? it was all caught on tape. and some new information from the fort hood massacre. the court-martial that is happening there, the defendant hasan saying his medical records should be presented in court. what those records say that has the judge so concerned next.

jenna: a raging wildfire threatening hundreds of homes in utah. gusty winds fanning the flames, getting dangerously close to a mountain resort town. also the growing use of drones may be good news for economic future. controversial as it is, creating tens of thousands of jobs and pumping billions in the economy. we'll tell you about that plus

do you think you're smarter than an eighth grader from 100 years ago? we'll give you a chance to prove it with a typical test from 1912. i'm still working on my answers, jon. no easy task for sure. jon: just in, police in arizona are teaming up with the f.b.i. as they try to identify a set of newly uncovered skeletal remains. they found the bones last week near tempe. crews combing through the area where they were discovered are expanding the search today. police have not confirmed whether they might be the remains of adrian salinas. she vanished from the area two months ago. there are reportedly similarities. anyone with information about her disappearance is encouraged to call the tip line. jenna: a strange case there out of arizona. we'll move to one out of oklahoma now. a smash and grab robbery caught on tape.

surveillance video shows two men stealing jewelry from a store monday night. thousands and thousands of dollars of julie were taken. they got away in a dark colored hyundai. police are still looking for them. jon: new info from fort hood, texas. disturbing testimony from pathologists that studied victims of the massacre. army psychiatrist is charged with opening fire on unarmed soldiers and civilians, killing 13 and wounding 31 others. casey is live at fort hood for us. multiple doctors supposed to take the stand today. what can we expect? >> yeah, exactly. three forensic pathologists we're expected to hear from and that will be the end of that particular testimony. we heard from four already yesterday and the day before. and their testimony has been, as

expected, extremely graphic. they've shown multiple autopsy photos of the 13 who were killed on this post back in november of 2009 and some of the experts have said that the evidence suggests a few of the victims shot after they had already died or in their backs when they were already on the ground. the pictures of the gunshot wounds they're talking about not broadcast on the big screen to protect the families who have been in the courtroom listening to the graphic detail of how their loved ones spent their final moments. surprisingly, no emotional breakdowns or tears, many of them clenching tissues just in case but they are really holding it together. frankly, i don't know how, jon. jon: so the time line for the rest of this court-martial, what does it look like? >> the dynamic has really changed. remember at the beginning part of the week and the latter part of last week, we were standing here being told by fort hood

public affairs that it looked like the jury would get the case at the end of the week but things have slowed down considerably once those expert witnesses started taking the stand, even with major hasan acting as his own lawyer, not doing any cross-examination of the witnesses. at one point, public affairs told us that this case would go to the jury but that is now not happening, at least this week. the prosecution now expected to rest on monday or tuesday of next week. then major hasan will call his two witnesses. hasan will then have a chance to do closing arguments as will the prosecution. once a verdict is reached and if he is found guilty, then we move into the penalty phase and that, we understand, would take another four or five days because remember, the 42-year-old army psychiatrist does face the death penalty here, jon. jon: it is just an awful story but i know so many of those families are glad that the justice procedure is finally

underway there. thank you. and coming up, the legal panel will join us with more on this latest testimony and what major hasan may be trying to do in offering so little of a defense. what is his goal? we'll get into it coming up. jenna: the unexpected death of a popular reality tv star sending shock waves through hollywood today. we'll have the latest details on this case plus the fed stepping in as the reigning miss teen u.s.a. says a stranger hacked into her webcam and nabbed photos. we have new reaction on the cyber stalking case that the f.b.i. is now involved in. that's coming up next. the great outdoors, and a great deal.

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jenna: new information this morning on the shocking suicide in hollywood and friends and family are reacting to the tragic death of former bachelor contesta contestant. her family taking her off life support yesterday, two days after her boyfriend apparently found her hanging in her new orleans home. we have few details other than that. she took part in spinoff series and many who knew her are shocked and surprised, taking to social media to express their grief. jon: the f.b.i. is investigating what it's calling a sextortion case involving the recently crowned miss teen u.s.a. 19-year-old beauty queen says someone hacked into her computer

webcam, took private pictures of her in the bedroom and is now demanding money for them. here is more on this strange story. >> it's a frightening scenario. it could happen to anyone. you think you're in the privacy of your own home when a perfect stranger hacks into your computer and uses personal information to blackmail you. latest sting happened to the teen u.s.a. according to the investigation, she and other women received anonymous emails from someone claiming to be in possession of newed photos of her taken via the webcam on her computer. she appeared on fox and friends this week and addressed the hacker breaking into the webcam in her bedroom. he captured photos of her naked. change your passwords often on the internet. >> you never know what people can do to you on line. social media is a huge thing w

nowadays so it's hugely important. >> this involves individuals who use social media or a computer's hardware to gain compromising information. in december this guy, it's a florida man, who hacked into email accounts and obtained naked images of celebrities was found guilty. he hacked into these celebrities' accounts. he was sentenced to 10 years in prison. the los angeles f.b.i. has told fox that they've identified more than a dozen victims in cassidy wolf's case and that agents have identified the alleged source of activity but due to the on going nature of the case, they're not commenting any further. jon: that's strange that that kind of thing can happen. julie, thank you. jenna: a new warning in egypt today where the latest crackdown left more than 500 dead. security forces announcing they will use live ammunition to suppress further violence.

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starting at $49 installed. adt. always there. offer ends soon. jenna: brand new story and breaking news this hour. some new fallout from the deadly violence gripping egypt. what president obama announced moments ago and the action the united states is taking. also a big story today sends stock shock on wall street.

what it means for your bottom line. are you smarter than an eighth grader who lived 100 years ago? a test uncovered from 1912 showing just what the kids were learning and it had lots of us growing up in 2013 completely and totally stunned. right, jon? big questions and answers coming up. it's all happening now. now this fox news alert on new protests in egypt hours after the deadliest day in that country since the start of the arab spring and the 2011 uprising that toppled the ruler. we're glad you're with us. i'm jenna lee. jon: and i'm jon scott. it was once one of the closest allies in the region and now egypt is gripped in all kinds of turmoil. there's a state of emergency, including a nighttime curfew. this as the death toll rises to for man 500 after police swept through two sit-in sites and went after pro morsi supporters.

muslim brotherhood says it was a massacre and today as the group called for more protests, backers of egypt's ousted president set fire to government buildings near cairo. this as nations around the world, including the u.s., condemn the bloody crackdown and president obama just made a statement on the on going crisis. wendell is live on martha's vineyard where the first family is on vacation. what did the president have to say? >> well, jon, the president announced the u.s. is cancelling next month's joint military exercise with egypt for the sebld time -- second time in a row. they've been held since two years after the egyptian-israeli peace agreement but they haven't been held since 2009 because of political upheaval. mr. obama said the u.s. opposes the military's declaration of martial law and also criticized

morsi supporters for torching churches and government buildings and said the u.s. can't do business as usual with the egyptian military. >> while we want to sustain a relationship with egypt, our traditional cooperation cannot continue as usual when civilians are being killed in the streets. and rights are being rolled back. >> president stopped short of using what may be his most powerful leverage, the $1.3 billion in u.s. military aid to egypt, although he said further steps may be taken. jon: and i guess the president also pushed back against the idea that the u.s. didn't doing enough to end the violence? >> he did. he said america can't determine the future of egypt even though the u.s. has refused to declare the military takeover a coup which is obviously was. the president insisted this country has not taken sides. >> we've been blamed by supporters of morsi. we've been blamed by the other side as if we are supporters of

morsi. that kind of approach will do nothing to help egyptians achieve the future that they deserve. we want egypt to succeed. we want a peaceful, democratic, prosperous egypt. that is our interest. but to achieve that, the egyptians are going to have to do the work. >> the president added the work will take time. he said the process may not be smooth and he suggested it could take a generation. jon: wendell, thank you. jenna: a lot of headlines out of egypt today and also new signs of carnage in iraq as well after a wave of car bombs rocked the capital of baghdad today. this bomb targeting the office of the traffic police and the government is blaming al qaeda militants in this. dozens of people were killed and many others wounded as you can tell a terrible event there. this is just the latest attack

in the surge of violence. more than 3,000 people have been killed in four months raising fears that the iraqi government is unable to control escalating sectarian violence there. jon: there are new developments in the on going civil war in syria. the united nations sending analysts to syria to investigate allegations of chemical weapons' use. the team is expected to visit three sites where the alleged attacks occurred but weapons experts are raising doubts they will find anything because the allegations are already months old. syrian regime reportedly has agreed to cooperate with the investigators. the latest u.n. report estimates the death toll from syria's civil war now more than 100,000 people. jenna: syria and iraq, we'll continue to watch what's happening in that part of the world. biggest names in republican politics and some rising stars. on day two of their summer meeting in boston today, among the headliners for the three-day summit, new jersey governor chris christie who will be

hosting a special event today. here is more. >> hi. that's right. chris christie is headlining a luncheon this afternoon but they kicked off their event today, the big event that really got things moving today was about the rising stars of the republican party, the g.o.p. highlighting those stars in a town hall meeting underway still right now. new initiative aims to inspire expansion within the party to promote individuals who are new voices, including women and minorities. among the new stars is a new hampshire state rep, first elected in 2006 when she was just 23 years old. take a listen. >> stereotype the republican party has of being old white men, they may be the ones on tv a lot, there are actually a lot of other ones working on the same issues and so it's important we're out there communicating. >> they also are putting a lot of focus on laying groundwork in

minority neighborhoods and reaching out when it comes to technology, particularly when it comes to use all across the country. jenna: we'll continue to watch the headlines there. molly, thank you. jon: a fox news alert. the dow is down sharply today. almost 200 points right now. there has been some disappointing economic news but there are also worries on the street that the fed is going to cut down on the money it's been pumping into the economy. nicole is live from the floor of the new york stock exchange. nicole? >> we're watching the market here that's been to the down side, significantly lower today so it looks like it will be two straight weeks of losses on the dow jones industrials. down over 200 points at the moment. economic news has been mixed. one thing that you noted and you hit right on it was about the fed's bond buying program. jobless claims came in a little better than expected and with the labor market improving some, people begin to worry once again

that the federal reserve may taper the bond buying program. they provide tons of money, liquidity, money and they give a boost not only to the economy theoretically and also this stock market. so you start to see the market worrying a bit and something else that would be evident of that would be our 10-year treasury yield. right now it's at 2.77%. so you certainly see the 10-year moving as well. as far as stocks we've been seeing, names like cisco systems and wal-mart have been weighing on the industrials. we're selling off in everything from technology to energy to financials. it is one of those days where they just sell everything. i'm going to leave you with a positive thought. don't forget, this year is a winning year on wall street with the s&p 500 up about 17%. you've had stellar performers like net flix, facebook, all just soaring and jumping and lots of names that are really doing very well this year. there's certainly a lot of winners but it's looking like a

weekly loss here and 200 point loss at the moment for the dow jones. jon: it's just picking the win he weres that's the hard part. thanks. jenna: new information on the fast moving wildfire in utah. the wind whipped flames spreading across 2,000 acres, destroying more than a dozen homes and inching closer and closer now to hundreds of others. folks are watching their homes, hoping and praying for the best. >> i've had the place about 10 years. >> we watched it for hours. >> i built a lot myself >> we're watching it right now from a distance. it's pretty sad. >> i'm just sitting here waiting. and see what happens. i just continue to watch it. jenna: that would be so incredibly difficult to be in that seat. crews are hard at work trying to tame those flames. touched off by lightning but at this point, the inferno is just 25% contained. it's just one of dozens of wildfires currently burning across the western part of our country today. jon: well, states across the nation are looking to get into the drone zone as the unmanned

aircraft get cleared for use domestically. why setting up the testing sites could be a real boost for local economies. we're live with that story and it might look like the biggest military surplus sale in the world. william is live in the california desert. william? >> everyone knows about the basically military buildup in afghanistan and iraq. what happens to all that stuff when the war is over? coming up, the untold story of the largest military drawdown in history. [ male announcer ] this is claira.

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jenna: a news alert out of lebanon now. we're getting reports of a massive explosion outside of beirut there. you can see this is brand new video that we just got into the news room. we have reports of at least three dead, some say reports of at least nine. more than a few dozen people

injured but again, just breaking, this explosion in an outside area of beirut, supposedly in a stronghold of the militant terrorist group hezbollah. hezbollah certainly very provocative in lebanon and one of the questions that surfaces here, we don't know how this happened, what transpired here but one of the big things we're watching is how the spillover effect in syria, what that might be in neighboring countries like lebanon. it's a question here but still very few details. quite an explosion there and a lot of conflicting reports. we'll bring you more details as we hear more. jon: the wars in iraq and afghanistan have left the united states government with tons of equipment overseas. so much of it, the air force could fly a loaded plane home every hour for 10 years and there still would be stuff over there. so how does the pentagon deal with it all? william is streaming live from the sierra army depot in

california. william? >> jon, the drawdown from afghanistan is the largest in military history, easily the most expensive at $6 billion to bring home 95,000 containers, 35,000 vehicles, many of which end up right here on a daily basis. after 12 years of war, what isn't scrapped, sold or crushed, ends up here. >> we send the equipment here, we manage it for the army until they can make a management decision about what to do with it in the future. >> 35,000 acres of desert, scrub and steel. sierra army depot is america's largest repositiv positiveposit repository of equipment.

getting it here isn't cheap. >> at some point actually it becomes more sensible to destroy that equipment in place than to actually bring it back. >> that's what the pentagon is doing. shredding 2,000 of massive troop carriers, selling them for pennies on the pound in afghanistan. >> did we overbuy? almost certainly. >> in all, the military will leave 20% of the total of the equipment in afghanistan. >> a lot of this stuff you're not concerned about bringing it back. if a coke machine falls into the hands of the tall pan, this is not a big disaster. >> yet with a click of the mouse, the spoils of war can be yours. what isn't stored or shredded is on gov liquidation.com. what you see behind me, the battle tanks, there are thousands here literally. in the distance, some of the armored personnel carriers, most of that stuff will stay in the u.s. inventory.

some will be sold to allies, some of it, the clothing, that's being recycled to troops out in the field but some does trickle down to us. i can tell you at the army navy store as well as on the government website i told you about in the piece, you're amazed at some deals that can be had on old stuff they don't need any more. jon: i'm going to tell jenna i want an abrams tank for my christmas present. maybe she'll pick it up for me there. jenna: not a bad idea, actually. new concerns over what obamacare may be doing to the quality of care that we will receive in the future. a new report showing more and more physicians are leaving private practice and more and more hospital mergers are happening so you're creating some saying, these big giant hospital systems. what does that mean for us, for cost and care? we have two doctors weighing in on that coming up next. plus we checked out a test for eighth graders back in 1912, jon, and we'll admit it's pretty

hard. it's not easy at all. this is a grammar question. do you know all the parts of speech? we talk a lot, jon. we should know that. there are eight of them, by the way. the answer is more questions. stick around to see if you're smarter than an eighth grader who lived 100 years ago. the postal service is critical to our economy.

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jenna: a new report in a lot of conversation about what's going to happen once obamacare goes fully into effect. and one of the big questions that surfaces is what about the care that we're all going to receive?

there's an article that was published in the "new york times" about hospital mergers and how we're seeing some huge hospital mergers. in fact, "new york times" says that potentially this -- in this country, we're creating giant hospital systems that may one day dominate the health care that we receive and drive up costs. that's one of the things that the article says. dr. scott is a physician and resident fellow for the american enterprises institute. dr. morris is a consultant with hospital executives on some of these mergers. so a lot is happening around the new health care law. it's great to have two doctors with us, those that actually practice medicine so thank you for coming on with us. what does this mean for the consumers? do you buy into this, that we are creating the giant hospital systems and what does that mean for us? >> well, we certainly are doing that and the affordable care act creates these hospital systems because it gives the government

more ability to get control over providers if they consolidated by hospitals, if they're owned by hospitals. you can regulate the hospitals rather than regulate down to the level of the provider and there's almost a magical belief that if you consolidate doctors, you'll get better coordination of care. sometimes it happens, oftentimes it doesn't. what we're seeing from these kinds of arrangements in the past and we've tried it in the past is productivity goes down among providers when they start to enter spew the owned relationships when they're working for hospitals. jenna: i'm sure some of that advises hospitals in these types of mergers. you might disagree with this assessment. >> i think there are many variables here and there are mergers that have not gone well and we've gone through a wave of physicians working for hospitals in the 1990's that did not work well. i think this happened before obama legislation really passed and hospitals have been merging

for a number of years. many are doing it for financial practices. a study was conducted of hospital mergers from 2007 and 2008 and we found those that merged had significantly better financial performance than those that remained independent when compared to their peers. and if you ask me -- jenna: do we know in that case, for example, do we know that the care also got better for patients? was that also looked at? >> no. not in that study. and that is, i think, one of the big questions and at the end of the day, hospitals are led by executives and people and physician leaders and they're the ones who have to develop a culture of care for their communities. but on the surface, if you ask me, i would rather go to a hospital that is financially making money than one that is losing money because financially well off hospitals would be able to attract the best and brightest doctors, have new equipment, operating rooms and things like that. jenna: that's an interesting point, that you want to go to a place that's a successful business, not one that is

struggling as an independent hospital and that is some of what we're seeing in the changing landscape of medicine. >> right. it's certainly true these trends are underway before the affordable care act. there's no question that obamacare did accelerate this. one of which is they're over paying on the inpatient side and cutting the outpatient side and so -- jenna: what does that mean? so for example, if i went to the emergency room and i needed help, what would that mean for the way i got treated or the way the hospital got paid? >> right. well, it's not necessarily with e.r. care but on a lot of procedures that are done both inpatient and outpatient like colonoscopies, doctors can make more money when they do those inside the hospital than outside the hospital so the hospitals are buying the physicians to capture that piece. what is going to happen is that money will be sent away eventually and then the hospital is going to find it very unprofitable to own the physicians. in the 1990's when this happened, basically the doctors merged from these relationships

and went back to doing what they were doing. i think now what's going to happen is the doctors are just going to get burned down by the hospitals. they'll see their reimbursement cut to levels where it makes sense for the hospitals continue to own them because those doctors aren't going to be able to go out and practice on their own. jenna: so if i could, does that mean the hospitals will be profitable but the doctors would not be as profitable? is that what you're saying? >> i think that's probably going to be the case because these doctors are going to be stuck in these relationships. it's going to put financial pressure on the hospitals as well. they're doing well now under these arrangements. they're not going to too well when the reimbursement schemes are there. when you look at the arrangements, productivity gets measured by inputs, not outputs so consultants look at this and say productivity doesn't go down because doctors are still doing the same number of procedures but you're not looking at what's happening on the output side and coordination and care doesn't improve because accountability goes down when the doctors will become salaried employees in these hospital owned relationships. jenna: and as you pointed out,

that trend was coming ahead of the health care law but dr. morris, one of the questions that comes up with health care, we know some of the fears that have come up. rationing of care, of not having the access we might want to have and whether or not that's true or not, a lot of this is just a lot of conversation ahead of the law going into full effect. but what do you think about the idea that the hospital systems are getting bigger? so we're getting, for example, some are describing the wal-mart chain of hospitals or these big chains of hospital. will that lack of competition affect the care and treatment that me or my family might have access to in the long run? >> that's a great question and the federal trade commission looks at all mergers and making sure there's still a competitive environment in each city and they turned down mergers and for example, when we look at work with our clients on the potential for mergers, many of those we say, well, not such a

good idea. what happens when you get to wal-mart size, i think that's a good question. we're not really there yet. i'll give you a quick example. one of my clients, faith based not for profit system owned about 20 rural safety net hospitals, hospitals very small that wouldn't be profitable on their own. they started working with them as one operating unit and were able to reverse the losses from those small hospitals and keep them open in these communities. they used innovative things like virtual pharmacists who can supervisors the preparation of medication in the middle of the night. that's some advantages of scale that you can bring when you're a big hospital system to community problems that are actually out there affecting people's lives today. jenna: it's an interesting point to end on. we would love to have you back for future segments because we're also seeing in the city of new york there's some chains, urgent care chains popping up in competition to some hospitals so we'll see how all of this changing landscape affects our care and our accessibility as

well. great to have you both. thank you so much. >> thank you. >> thanks. jon: well, hospitals are getting big and unmanned aircraft are also becoming big business in the u.s. before these drones take off, someone has to give them a test flight. dozens of states are competing for the opportunity and the money and jobs that come along with all of that. fox business network peter barnes joins us live from washington with that report. >> two dozen states are competing to be the homes for test sites for what is expected to be a major new high tech industry in the u.s., non military, unmanned aircraft or drones. states with plenty of wide open spaces for testing like utah, nevada and north dakota are here in d.c. at the annual drone association trade show. they're spending millions to win f.a.a. flight testing contracts that will be awarded to six states by the end of this year. in march the association for unmanned vehicle systems international estimated the economic impact of the civilian

drone industry will be $82 billion from 2015 to 2025. generating 482 million in new tax revenues for states and creating more than 100,000 new jobs. mainly high wage, high tech jobs. >> with the state 700,000 people, you could see the potentially, you know, thousands of additional jobs, initially and then a spinoff jobs from that as well, the expansion is, you know, you have to be seen but the potential there is real. >> civilian drones have many applications, including monitoring agriculture, mapping wildfires, improving law enforcement and yes, in tv news coverage. the f.a.a. is on a deadline of 2015 for developing regulations for safe civilian drone use. jon: safe being the operative word there. peter barnes in washington, thank you. jenna: there's new outrage over just how our wounded warriors

are being treated today at america's premier military hospital. apparently, there's some trouble at walter reed hospital and you will see a report right here on fox about that. plus more gruesome and disturbing testimony in the fort hood massacre. court-martial, the impact this could have on the 13 officers who will decide hasan's fate and why this may put his defense on shaky ground as we already know it really is. what is his intention? our legal panel takes up the case next. the great outdoors, and a great deal.

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jenna: well, "happening now," disturbing new revelations about the treatment of america's most severely wounded troops. walter reed hospital has cut back sharply on the dining options in the main recovery wing there where most of the outpatient wounded warriors are housed, forcing them and their families to walk or wheel themselves a half mile to one of the temporary food trailers. those trailers often times are not handicap accessible. our national security correspondent, jennifer griffin, is live from the pentagon with more. >> reporter: well, jenna, earlier this month the military decided to invalidate meal tickets and reduce the hours at the warrior café, the sole dining facility in building 62u where all the multiple amputees and long-term recovering patients live with their families. the decision, which was announced at a town hall last

thursday, would effect a double amputee and about 160 other families who spend up to two years in building 62. they were told their government-issued meal tickets would no longer be valid, and they would have to walk or wheel themselves nearly a half mile across the campus to these temporary food trailers for breakfast, lunch if dinner. >> from building 62, i would say it's close to a half a mile. from building 62 to the nex, which is just right across the road, is aha half a mile, so it's around there. and for guys, you know, that don't have legs that are, you know, new on their prosthetics or in a wheelchair, it's a long distance to go. >> it breaks my heart to know now back i get in the vietnam war when men and women who were coming home, how they sort of feel like?

>> reporter: that was the mother of a triple amputee who's recovering up at walter reed. the warrior café is a central meeting point for warriors and gives them a sense of independence. closing it on the weekends leaves them to fend there for themselves as today learn to walk again. the parents and wives of these warriors say it is a big setback, some said they would just not eat on the weekends. originally, the army decision to revoke meal card privilege bees at the bar your café was due to -- warrior café was due to legal issues. we were told by kathy wilkinson that the assistant secretary of defense for health affairs has decided to reverse the changes, but so far the patients at walter reed have not been notified of that decision, and lawmakers have not been told how the army and pentagon intend to get around their initial legal concerns if, in fact, that was the real reason to make the changes in the first place. jenna?a: a story we'll continueo

follow, jennifer. thank you. jon: and following this story, dramatic testimony at the court-martial of major nidal hasan. government witnesses detailing the autopsies performed on some of victims of the fort hood massacre. forensic pathologists say it was clear that hasan was shooting people while they were lying on the ground, some were even dead at the time he shot them a second time or third. hasan, who is representing himself, sat quietly and unemotionally. it comes after reports that the army psychiatrist told mental health experts he wished he had been killed in the attack but that he still will be a martyr if he's convicted and executed. joining us now, rebecca rose woodland, jonna, they are our legal panel for today. so this information that "the new york times" got ahold of came from his former lawyer, one of the many that he has fired, who said -- who released to the paper the interviews that he did back a couple of years ago in which he said, yeah, i wish i

had died in the attack because that meant god wanted me to be a martyr, but i'll still be a martyr if the government kills me. so should we let him have what he wants? >> i say, absolutely, let's let him die. it's a shame we had to put all these witnesses through a trial, but nidal hasan has crawled into this gaping loophole in the law, and it's this: when you're facing the death penalty as a sentence, any defendant is not allowed by law to plead guilty. you have to have a trial. so what he did was say, okay, i'm going to fire all my lawyers, represent myself, i'm going to get up there and basically tell the trier of fact that i did it s. so how could we not come to any conclusion that he's, a, guilty and he should be put to death? it seems like a no-brainer. jon: he's paralyzed from the waist down, rebecca. some say the more delicious punishment is to let him rot in prison for the rest of his life. >> that would be but for the fact that the penalty in this case, in this tribunal is death.

that is the ultimate penalty. so we will see what the judge issues as a sentence. it will be up to the judge at this point because he has basically admitted everything. the only positive i find in this is that at least he's not cross-examining, as his own attorney -- he's representing himself, he has a constitutional right to do that, so they have to allow it -- he is not going to cross-examine the victims who have remained, the people who he shot but didn't kill. thank god for that. that's about the only thing we can say. jon: yeah. because some of these poor people who have been testifying took horrible wounds and so forth. the chaos as this guy was shooting them and, basically, he admits it. >> yeah. and it's disgusting. and here's my one fear, though, about his strategy whether, you know, whether we sentence him to death or not, if he gets sentenced to death, he's going to have an automatic appeal, and i don't want -- which i hope he will waive, because then it's a fast track to the electric chair, whatever thai going to do to him to end his life.

but i don't want it to backfire in the sense that an appellate court finds that he, by representing himself, he was incompetent and is entitled to a new trial. that's what i don't want to happen, and that's a possibility here. jon: just the fact that he is barely mounting a defense be at all, doesn't that become appealable? >> the issue is, though, the judge has consistently and continually asked him, he has provided attorneys for him, asked him are you accepting your own defense? you understand there's counsel at the table for you, you are not availing yourself of them. that is why the judge has forced -- because some of the counsel wants to be removed -- forced the attorneys to remain in the courtroom with him so that any appeal will be nil. enough is enough. it'll be like timothy mcveigh. he wanted to die, well, he ended up being put to death by lethal injection in oklahoma. this man, will he be a martyr to his people? the point is we still have to go

by the law in america, in this arena. jon: well, it's just an awful case, and, you know, my hat is off to those witnesses who have to, you know, testify against the guy who shot them -- >> could you imagine? jon: -- and he's sitting there, you know -- >> and look him in the face. and he has no remorse. jon: yeah. rebecca, jonna, thank you both. jenna: new protests rocking egypt as the u.s. cancels a key military exercise, that's not sparking the protests, but what else could the united states be doing in response to this deadly crackdown by the military? we have more on this developing story. also, is new york city on the brink of a detroit-style bankruptcy? new york city has been on the brink in the past. the warning from the mayor mike bloomberg that just came down. a question that's surfacing today, is this real? is this really where new york city is today, or is this somehow just a scare tactic from the mayor? we're live with that story next. ♪ ♪

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♪ ♪ jenna: new fears today that america's largest city, new york city, could be headed in the same direction as detroit with surging pension and health care costs threatening the city's financial health. new york is not the only major city, as you know, in dangerous territory, but there are some specific questions for new york and new york city's mayor. david lee miller is live with the details. >> reporter: detroit is the largest city in the u.s. to declare bankruptcy, but other even larger cities could be next. in little more than three months, new yorkers will elect a new mayor. a recent warning from michael

bloomberg to his successor is reverberating around new york. >> avoiding the hard choices is how detroit went bankrupt. >> reporter: bloomberg says pension and health care costs for city workers that contributed to detroit's financial ruin threaten new york's economic stability. most new york city employees and retirees pay nothing for $6.3 billion in annual health insurance. workers also pay little for pensions that have taxpayers on the hook for $8 billion this year. >> new york city has right now 10,000 police officers retired who are under 40 and collecting pensions, and they will technically collect those pensions for the rest of their lives. >> reporter: contracts for almost all 300,000 city workers expired at least three years ago. the next mayor will be under pressure to win concessions. >> the unions have tried to weed it out. they don't want to negotiate with mayor bloomberg because he's a tough businessman. >> reporter: many new yorker's remember 1975 when the city

almost went broke after president ford be said no to a bailout. since then, a state financial control board oversees the city budget. the editor of the chief, a newspaper for city workers, calls bloomberg's warning about a detroit-stale bankruptcy fear mongering. >> i think it's partly a scare tactic and it's partly about spin, of looking to deflect blame for his basically having abdicated his responsibility as mayor to negotiate timely new contracts with the unions. >> reporter: according to mayor bloomberg, every u.s. city has a lesson to learn from detroit's bankruptcy including chicago where escalating pension costs have contributed to layoffs in the city's school system. across the country state and municipal pensions are underfunded now up to a trillion dollars. jenna? jenna: wow, what a story. david lee, thank you. jon: some brand new polls out on the president and how he's handling the economy. what do the american people really think? we'll go in depth. and do you think you're

pretty smart? do you know more than, say, your average eighth grader? well, what about one who lived more than a century ago? a test just unearthed from 1912 could have you thinking a little differently. what the average eighth grader knew back then. that's next. ... ... ... ... . they're fruity delicious! just two gummies have 4 grams of fiber!

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jenna: well, as a journalist, you know, our job is to ask the right questions and, hopefully, find the facts, and we had a really hard time with this next story, and here's some of the reasons why. here's some of the questions we were asking. can you name three duties of the president? three duties. do you know how many parts of speech there are? who first discovered the following places: florida, the pacific ocean and the mississippi river? do those come to the top --

would you know, jon? jon: two of those, i know. jenna: oh, please. jon, of course. if you're like the rest of us -- [laughter] don't feel bad if you're stumped without using the internet. so were we, quite frankly, and to make it worse, these questions are from a test administered to kentucky schools in 1912 to eighth graders. eighth graders. david strange is the executive director of the bullet county history museum located in shepherdsville, kentucky, and the only thing that made me feel sort of okay is knowing that you, the smart guy at the museum, also had to turn to the internet -- [laughter] to find out some of these answers. how difficult was it? >> well, i remember, i actually remember most all of these questions or similar to them being taught and asked when i was in high school -- jenna: oh, come on, you weren't around in 1912, david, please. [laughter] >> no, but when i was in high school, in the '60s and '70s, i remember being taught them. now, remembering them is another

thing. and we were, when this was given to us, i had the original here, we were all -- we weren't given a cheat sheet, we weren't given an answer sheet. we had to come up with the answerers ourselves, and that was a challenge. and, yes, we did use the internet. jenna: i'd like to get to the questions in a moment but, first, tell us how you found this test. where did it emerge from? >> well, a real nice lady in our county, karen smith, she was going through a stack of papers, she tells us, mostly from the 1930s, some old photographs and things, and came across it in that stack, brought it in to us to see if it interested us and, of course, we did. we didn't realize it would be such an interest to the nation. jenna: and it's really become a viral success story. >> oh, it has. jenna: and really puts your museum on the map, which is great. we're going to mark it. when we're next in kentucky, we're going to come by and see you, david. let's talk about one of these questions. for example, the three duties of the president, the three duties of the president, david, what

would be those three duties if we were to get 100% right? >> okay, let me see if i can get 'em. [laughter] one is as the executive of the nation, he is to see that the laws are faithfully executed. he appoints the federal judges, ambassadors, members to his cabinet with the advice of the senate and their consent, of course. and let's see, a third one, um, he -- as, again, the chief of the nation, he oversees foreign policy. jenna: okay. so we should all be able to rattle those off at the top of our head. how about this one, who first discovered the following places? i'm just going to pick one. who first discovered the mississippi river? do you know, jon? jon: that's the one i don't know. jenna: david, who first discovered the mississippi river? >> for some reason i remember it's desoto, i believe, discovered that. and, of course, those questions are controversial nowadays in themselves. you know, native americans were

here already and various arguments about that. so i guess in those days those were definitely the answers requested, today we would be more specific about the europeans discovered. jenna: we need to do some fact checking, we have different names too. there's eight different parts of speech? >> yeah. and even that gets challenged some. we got one of fascinating things with this is all of these e-mails, messages and questions we've had from across the nation. but there's eight parts of speech is the way i was taught. i am also told there was a ninth part that is, includes the, and, some of those words. but the parts are like nouns and verbs. jenna: we have the whole test so our viewers know up on our web site. we just picked out a few that, wow, we should probably know. david, as executive director of this museum, you know, what do you think this tells us about where we've come in the last 100

years? >> well, and our museum's just a small museum, just a group of volunteers, we're housed in the county courthouse in there, do the best we can. again, i'd just say when i was in school most of these questions are good, basic questions, though they're hard. i don't think at any time was the real purpose to know specifically that answer. it was to get you to know about the world and know you around you and know some things about the world, some of the gee geogy questions and all. jenna: the geography questions are tough, by the way. [laughter] >> one of those, for example, is that i like to comment about is it asks several countries in central europe at the time. and i was asked many times why would a cayenne need to know that? -- kentuckyian, these to know it? they didn't know it, but it was going to become world war i. jenna: well, we really encourage our viewers to check out the test and, david, we appreciate

the time today. hello to your team at the museum, and we look forward to talking to you in the future. >> thank you. you're more than welcome. jenna: check out our web site. we'll be back with more "happening now." back on her feet. [ all gasp ] oj, veggies you're cool. mayo? corn dogs? you are so outta here! aah! 'cause i'm re-workin' the menu, keeping her healthy and you on your toes. [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. i see you, cupcake! uh-oh! [ bottle ] the number one doctor recommended brand. ensure®. nutrition in charge™.

>> proving that things may be more accurate. go to our happening page. we'll work on it. >> thanks for joining us. >> america live starts right now. we start with a fox news alert. a crucial u.s. ally in the middle east spiralling out of control as we learned disturbing details of how egyptians are using the chaos as a cover to attack christian community ands burning churches and looting businesses in what looks like hate on a vulnerable